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Analysis of Competitiveness and the Impact of Government Policy on Patchoulicommodity in Pasaman Barat District

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Analysis of Competitiveness and the Impact of Government Policy on Patchoulicommodity in Pasaman Barat District Enrichment: Journal of Management Volume 12, Issue 1, November (2021) e-ISSN 2087-6327 p-ISSN 2721-7787 Enrichment: Journal of Management journal homepage: www.enrichment.iocspublisher.org Analysis of Competitiveness and the Impact of Government Policy on Patchoulicommodity in Pasaman Barat District Muhammad Farrasky Delas Putra1, Faidil Tanjung2, Ifdal3 1,2,3 Universitas Andalas, Padang, Indonesia A R T I C L E I N F O A B S T R A C T Patchouli oil is Indonesia's potential essential oil which is widely traded in the world market. This study aims to analyze the competitiveness of patchouli commodities in West Pasaman Regency and analyze the impact of government policies on the competitiveness of patchouli commodities in West Pasaman Regency. The method used in this research is a survey method. Analysis of the data used in this research is descriptive quantitative using a measuring instrument Policy Analysis Matrix (PAM). The results showed that Patchouli Farming in West Pasaman Regency already has competitiveness based on the acquisition of private and social benefits as well as Keywords: competitive advantages and comparative advantages. Competitive advantage is Competitiveness, Policy Analysis Matrix, expressed by a PCR value of 0.64 < 1. Comparative advantage is reflected by a DRC Patchouli Oil. value of 0.56 < 1. PCR and DRC values that are smaller than one indicate that the commodity has competitiveness. The closer the value is to 0, the commodity has high competitiveness and is very profitable to cultivate. The impact of government policies shows that there are government policies that inhibit commodities with taxes on output and there are government policies that are protective of tradable inputs. This is indicated by the value of the Nominal Protection Coefficient of Patchouli commodity output of 0.89; Nominal Protection Coefficient Input of 0.48; Effective Protection Coefficient of 0.90; Profitability Coefficient of 0.73; and the Subsidy Ratio to Produce of -0.12. E-mail: [email protected] Copyright © 2021 Enrichment : Journal of Management. [email protected] All rights reserved. [email protected] 1. Introduction The agricultural, forestry and fisheries sectors have a fairly important role in the world's and Indonesia's economic activities. These sectors have a contribution to Gross Domestic Product (GDP) which is around 13.14 percent in 2017 or is second only to the manufacturing sector (BPS, 2017). The agricultural sector, especially the plantation sector, has a large enough role. Plantation commodities are the mainstay of Indonesia's national income and foreign exchange. Judging from the export value of plantation commodities, in 2015 total plantation exports reached US$ 23.933 billion or equivalent to Rp. 311.138 trillion (Ministry of Agriculture, 2017). One of the plantation industry sub-sectors with great potential is essential oil. The value of Indonesia's essential oil exports in 2015 was US$ 180 million. This value jumped 15.1% compared to the export value in 2014 which reached US$ 156 million (Ministry of Agriculture, 2017). There are 80 types of essential oils traded in the world market, while Indonesia has only exported 12 types of essential oils. This is indicated by the variety of essential oils produced by Indonesia to be traded in the international market. Essential oils that cannot be traded include clove leaf oil, clove flower and masoi oil (Indonesian Atsiri Council and IPB, 2009). According to the latest data from Bank Indonesia, the world's need for patchouli oil ranges from 1,100 – 1,200 tons per year with an annual supply of approximately 900 tons. By looking at the difference between demand and supply per year, there are still market opportunities of approximately 200 tons per year (Ministry of Trade, 2017). In line with the opening of free trade and existing opportunities, efforts are needed to increase competitiveness. Quality, quantity and timeliness of product supply are important points that must be met to be able to compete in the world market. Therefore, increasing competitiveness is a demand that cannot be avoided by manufacturers so that products are able to compete in the global market. Competitiveness is the ability of producers to produce with good quality and low costs so that at prices that occur in the international market, producers can produce and market them with sufficient profit so that they can maintain their business continuity (Murtiningrum, 2013 in Fitri 2017:5). The approach that is often used is the level of profit and efficiency. The advantages are seen from two sides, namely private benefits and social benefits. Meanwhile, efficiency can be seen from two indicators, namely competitive and comparative advantage. In West Pasaman Regency, patchouli is one of the mainstay commodities with a clear market. The people have known patchouli for a long time and still make patchouli a desirable plant. Besides that, ecologically, the West Pasaman Regency is very suitable for patchouli cultivation. Some of the common obstacles encountered related to patchouli commodities in West Pasaman were the low yield of patchouli oil obtained, the low and varied quality of the oil and fluctuating selling prices. The problems above are closely related to one another so that new efforts and breakthroughs are needed that can eliminate these problems. The West Pasaman Regency Government through the Plantation Service has carried out various policies to increase the competitiveness of plantation commodities through efforts to increase efficiency, productivity of commodity agribusiness businesses that will increase farmers' income and encourage state revenue through export foreign exchange (West Pasaman Plantation Office, 2017). The government of West Pasaman Regency has implemented a fertilizer subsidy policy for patchouli farmers to support the increase in patchouli production. It aims to increase patchouli production and improve the quality of patchouli essential oil. Page | 11 Enrichment: Journal of Management is Licensed under aCreative Commons Attribution-NonCommercial 4.0 International License (CC BY-NC 4.0) Enrichment: Journal of Management Volume 12, Issue 1, November (2021) e-ISSN 2087-6327 p-ISSN 2721-7787 Enrichment: Journal of Management journal homepage: www.enrichment.iocspublisher.org West Pasaman Regency is a patchouli production center in West Sumatra. Therefore, it is necessary to study the competitiveness of patchouli commodity exploitation in West Pasaman Regency. Furthermore, strategic efforts to increase the competitiveness of Indonesian patchouli in the international market can be determined through fiscal policy support. Patchouli commodity trade is inseparable from government policies such as quotas, tariffs, taxes and subsidies, considering that patchouli is an export-oriented Indonesian plantation commodity. The policy is related to the input and output of patchouli commodity exploitation. Existing government policies will also affect the competitiveness of patchouli commodities in West Pasaman as one of the centers of patchouli production in West Sumatra. This policy will affect the input and output of patchouli commodity business in West Pasaman. Policies that cause input costs to decrease and increase the use value of outputs will increase the competitiveness of patchouli commodities, while policies that cause input costs to increase and output use values to decrease will also reduce competitiveness. To see how the competitiveness of an agricultural commodity and see how the impact of government policies affect these commodities, an analytical tool in the form of a policy analysis matrix (PAM) is needed for these commodities. Through a policy analysis matrix approach, it will be seen whether a commodity has competitiveness after intervention from the government in the form of a policy and how the influence of that policy on the feasibility and competitiveness of a commodity can be seen and formulated through the values or indicators contained in the policy. analysis matrix. The higher the competitiveness of an agricultural commodity, the more profitable it will be for farmers to cultivate. For this reason, it is important to analyze the competitiveness of patchouli commodities and the impact of government policies on the competitiveness of patchouli commodities in West Pasaman Regency. 2. Method The method used in this research is a survey method. The survey method is an investigation conducted to obtain facts from existing phenomena and seek factual information, both about social, economic or political institutions of a group or an area. The survey method dissects and skins and recognizes problems and obtains justification for the current situation and practices (Nazir, 2009:56). The survey method used in this study aims to obtain information about the description of patchouli farming, information about input-output prices in patchouli farming obtained from respondent farmers. So it can be seen how the condition of competitiveness and the influence of government policies on patchouli commodities cultivated by farmers in the research location. The data collection technique used in this study is an open interview method, where researchers can ask respondents about the facts of an event in addition to their opinions about existing events. This interview was assisted by an interview guide, namely by compiling a list of questions (questionnaires) that were posed to respondents by means of direct question and answer between researchers and respondents as
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